HR Factors - National Bank of Abu Dhabi - Case Study Example

HR Factors that Affect Quality Service in the Banking Industry in the UAE (National Bank of Abu Dhabi) of the of the professor: Literature Review Challenges of customers service quality Customers are the most important part of banking industry. The growth and success of the banks highly depend on their customers. The banks need to put huge effort to satisfy its customers. But recently the banks of UAE are facing problems related to its customer service. For this reason many potential customers of the banks are walking away without investing or keeping their money in the banks. The structural change of UAE’S banks is one of the important causes for the increase of problems related to their customer service. The unprecedented changes of bank’s structure are not been able to deal with customer’s changing needs and requirements. National Bank of Abu Dhabi also faces strong problems with their customer service departments (Bahia and Nantel, 2000). It is the most difficult and complex challenge of the bank. In UAE banks are the important part of service industry. The customers’ expectations in this country are changing a lot with time. Customer service is related to three major departments of the bank. Its branch network, website and call centers deal directly with the customers. But the National Bank of Abu Dhabi and other banks of UAE have all these departments but they are not competent enough to manage these departments effectively. For taking financial services customers use these departments but the banks are not able to satisfy their customers. Inefficient customer services of these departments leads to the increase of customer’s dissatisfaction. National Bank of Abu Dhabi is facing a strong competition from its rivals in banking and financial industry (Lassar, Manolis and Winsor, 2000). For this reason the company is focusing more on its various financial products. It is not giving much effort to improve its customer services. As a result the bank is losing many potential customers. The loyalty of its customers is also decreasing for bad quality of services. The bank is not proving satisfactory services to its existing or old customers. They are facing problems with the financial products that they have purchased from the bank. But the bank is not concerned to solve those problems. As a result the loyal customers are losing faith from the bank. People from different nationalities and cultures reside in UAE. Therefore they have various types of expectations. So the banks of UAE need to deal with wide range of customer expectations. These financial institutions do not have such efficient employees who can deal with wide range of customer expectations. The banks of this country are facing the problem of understanding its customers properly. For this reason the banks cannot make their employees capable to provide effective service to their customers (Malhotra and Mukherjee, 2004). The banks of UAE have implemented a new type of service culture for increasing their productivity. But this service culture creates a negative impact on customer service part of the banks. The service culture has become an obstacle for providing high quality of customer service. The management system of UAE’s banks does not provide many benefits to the employees who are involved in providing customer services. As a result they are not motivated or interested to deal with the customers. They try to overlook the problems of customers by providing low quality of services. The organizational culture of most the UAE banks are profit and employee oriented. Their business is based on the customers but their organizational cultures are not oriented to customers. For this reason the employees of banks do not feel the urge of delivering good service to their customers. Most of the banks of UAE do not use improved technologies which can help the customers to solve their doubts and problems. The banks which have those technologies do not use technologies properly while dealing with customers. Customer feedback system is not very popular in these banks. They are not concerned with the experience or thoughts a customer has regarding their service. For this reason they do not take customer feedback system seriously. The customers of many banks do not get any platform to express their opinions and problems regarding the banking service. The staffs of the banks are not trained enough to deals with different types of customers and to solve their problems. Their behavior is not good with the customers. They are just concerned to sale the financial products and services. For this reason the employees of these banks lack the power of retaining or winning back the trust of their customers. All of these challenges lower the quality of customer service in the banking industry of UAE. Views of different researchers Banking sector industry of UAE faces strong problem with their customer service department. For their inefficient customer service the banks of UAE are not able to retain and satisfy its customers. HR factors of the banks play major role in influencing the customer service quality of banks. According to the authors Sureshchandar, Rajendran and Anantharaman, service quality is closely related to customer satisfaction level. HR rules and policies of a company are designed in such a way for improving the business process by satisfying the organizational members and also the customers. The authors state that without effective communication system it is not possible for the banks to improve and develop their customer service activities. HR policies and strategies need to be developed in such a way which communicates the vision of the company effectively to the employees. This process involves in maintaining important documentations for dealing with the problems of the customers. In case of banks the authors say that the communication process plays a vital role in knowing customers needs and demands. But the banks of UAE do not communicate with its customers in a good way. As a result the customers of these banks are not satisfied with the way the bank employees communicate with them (Sureshchandar, Rajendran and Anantharaman, 2002). But the authors Al-Marri, Moneim, Baheeg Ahmed and Zairi think that effective training and development of employees helps to bring customer satisfaction in the business. If an employee is well training about the service it should provide to the customers then there are fewer chances to dissatisfy the customers. Good customer service helps to generate more revenue in the company and contributes a lot in its growth and development. But weak training and development programs create major challenge in service industry. In this industry employees directly interact with the customers. Therefore it gives them huge opportunities to know and understand the customers. A trained employee is capable to apply different effective process to convince and retain customers. But in the absence of training and development the employees are unable to understand the importance of customers in the success of business. As a result they do not maintain good behavior or norms while dealing with customers. The banks of UAE face this problem. The customer service departments of the banks are affected mostly for this problem. For ineffective training and development programs the banks are not able to develop the skills and capabilities of their employees for dealing with customers. The bank staffs try to avoid the problems of the customers. If the employees get involves in solving customers doubts and problems then they delay the banking process. This make the customers dissatisfied with the banking service of UAE. So if effective training was provide to them for dealing with customers then the employees could have been capable of providing good customer service (Al-Marri, Moneim Baheeg Ahmed and Zairi, 2007). On the other hand the authors Herington and Weaven focused on high quality of online service which helps to improve the relationship of the banks with its customers. In the present time people do not have so much time that they can visit to bank for buying any financial service or products. People have become familiar with modern technologies. So they prefer to use online ways for doing bank transactions. This helps them to save time. Therefore in the competitive environment the banks need to maintain strong online or internet banking system which will help them to retain and satisfy its customers. For maintaining this process the banks have to keep efficient customer care team. This team will always be ready in assisting the customers for doing internet banking. The customers can face critical problems in internet banking. They depend highly on the customer care team for solve those problems and provide the financial service easily. When a customer gets good service from the customer care team of a bank while doing internet banking then he starts to trust the bank more. HR policies of a bank also influence its internet banking. The employees involved in customer care department of banks must be motivated and provided with good career opportunities. These factors will help them perform their job effectively for getting better opportunities in their career. If the employees are not motivated properly to deliver high quality of customer service in internet banking then the bank will be not able to satisfy the changing needs and demands of its customers. As a result the bank will slowly lose its customers and won’t be able to acquire new customers (Herington and Weaven, 2007). In today’s competitive environment the way for the organizations in the service and industrial sectors to win the loyalty of the customers is to provide the customers with superior service or innovative range of product. In a research in this direction by the researchers Irfan, Mohsin and yousaf the focus of the research was to prove that well structured HRM policies by the organizations and the commitment by top management towards quality practices play a role in customer and employee satisfaction. Through their research the researchers concluded that the quality of the service provided by the employees in an organization depends on the commitment of the employees. The organizations which invest in the training of the employees and building the learning abilities of the employees so that they can perform their tasks effectively and efficiently benefit from quality customer service extended by the employees (Irfan, Mohsin, and Yousaf, 2009). In agreeing with the views expressed by the above researchers, Tsar and Lin state that the human resource of a firm are responsible for creating positive behavior amongst the employees which in turn leads to or has an effect on the quality of service that the employees provide (Tsaur, and Lin, 2004). According to Davidson there exists a strong relationship between the culture and climate that exists in an organization and the quality of service that the employees of the organization provide (Davidson, 2003). According to Akaba it is important for the staffs of an organization to better understand the different demands by different segments of customers in a bank so that he or she can effectively fulfill the specific demands by the customers (Akbaba, 2006). According to Torres, and Kline, customer delight is a far better measure of customer relationship as compared to customer satisfaction. They state that this is so as because if the customers of an organization are delighted with the service that the particular organization provides then they are likely to recommend that organization to their friends and family members. This is what is actually wanted by the organization and the best possible way to market an organization (Torres and Kline, 2006). According to the researchers Noone, Kimes, and Renaghan, the organization where the hr practices are directed towards making the employees feel that they are part of the organization provides better service to the customers of the organization. In other words an organization where employees are taken care of by the organization, the employees feel that they are part of the organization. If the employees feel that they are part of the organization they work with extra dedication and provide better service to the organization and its customers. If the employees serve the customers with extra dedication then the quality of the customers’ service provided automatically improves (Noone, Kimes and Renaghan, 2003). Research Analysis It is found as the conclusion to the literature review that the human resource management has a big influence on the quality of customer relationship that is exhibited by the staffs of an organization. It is because proper human resource practices results in employee motivation and encouragement of the employees of the organization so that they work with extra dedication and serve the customers in a better manner. There have been several studies in this field that have tried to estimate the impact of human resource practices on the quality of human resource practices. The studies have focused not only on the banks but different service industries. The researchers have found that there are several human resource factors that are related to customer satisfaction. The human resource practices and the organization environment of a particular organization have both direct and indirect effect on the satisfaction level of the customers of the organization. Great human resource practices leads to motivation of the employees and the employees’ satisfaction. If the human resource practices of an organization enable the employees of the organization to have a feeling that they are an important part of the organization and the organization cares about them then they will be inclined to serve the customers of the organization with a greater zeal. If the employees are treated with value ion an organization then they feel an ownership approach towards the organization. If the employees feel that they also own the organization then that is bound to reflect in the service that they provide to the customers of the organization. It is also found through the literature that the focus of the upper management towards the customer satisfaction levels and the value that they attach to the customer service levels also has an impact on the quality of customer service that an organization provides. In order to find the challenges that are being faced by the banking sector in UAE and the Hr factors that can be used to overcome these factors a survey is conducted. There are two types of research that can be conducted under the research for data collection. One of the methods is to collect primary data and conduct research based on the primary data. The other research is to base the research on the existing researches done by the scholars in this field. This type of research is the secondary research. In this case the focus is on conducting primary research in order to collect raw data through surveys and then to analyze the same. There are two types of analysis that can be done on the collected data. One is quantitative analysis and another is qualitative analysis (Kumar, 2014). For the analysis the data needs to be collected from the sampling. For the sampling part random sampling needs to be done. However the problem with random sampling is the difficulty to ensure that the sampling method is really random. There is some inherent problem of biasness that is associated with random sampling. The problem of biasness cannot be removed depending on whichever be the sampling method that is actually used. This is because whatever is the algorithm chosen to make the sample random there must be some logic behind the algorithm and there is some resultant biasness as a result. After collecting the raw data from the surveys the data is analyzed through quantitative analysis of the data is done in order to understand the validity of the assumption and the hypothesis that human resource practices actually helps in ensuring quality of customer service. Qualitative analysis on the other hand relates to the focus of research on characteristics that cannot be quantified. These are characteristics like industry cycle, management expertise, feelings and reactions of the staffs to a particular managerial decision. It can also relate to the loyalty of a customer towards a particular industry and other feelings of the customers and customer perceptions that cannot be quantified in real terms. In this current study the challenges that are being faced by the banks in the UAE is identified. The study in particular relates to the national bank of Abu Dhabi. In order to understand the implication of the human resources practices on the customer relationship management it is important to conduct quantitative research. In this research the research methodology that is being proposed to be used is descriptive research. Descriptive research is aimed at gathering data for the research without there being a manipulation of the context and paradigm of the research. It deals with a research sector where the researchers have no control over the natural variables of the research. In order to study the challenges that are being faced by the banking sector in the UAE in general and the National Bank of Abu Dhabi in particular a questionnaire was put forward to both the customers of the bank and staffs of the bank or the employees of the bank. The questionnaires were used to judge the customer service quality of the banks and also to analyze if there is any gap in what the company feels that the customer wants and what the customer actually wants. In the bank the questionnaires were put forward to the customer service executives, and tele-banking executives of the bank along with the relationship managers. Questionnaires were also put forward to the customers of the banks in order to confirm and have an understanding of the feeling about the customer service quality that is provided by the bank. The survey that is put forward to the customers is given below Are you satisfied about the customer service provided by your bank? Would you refer your bank to any of your family members or your friends? Do you get favorable response from the customer care executive or the relationship manager in case of difficulty faced by you? After analyzing the result of the survey it was found that most of the customers were not satisfied with the level of the customer service that was provided by the banks. They felt that the relationship manager and the customer executives and tele-banking executives were not efficient in dealing with the problems. They also said that they would not refer their banks to their friends or relatives as they did not want that their friends or relatives should have the same experience with the banks as faced by them. They referred to the increasing use of technology by the banks as a good move. The business customers of the bank particularly appreciated this move by the bank. However they felt that once one encounters a problem with the online system and tries to approach the humans the problems starts creeping in. It is found that nobody is there to respond to the problem. The research results are also supported by the data from survey by the Souqalmal.com. The survey done in 2013 shows that only 11% of the customers of the banks of UAE would refer their banks to their family members and friends (Kassem, 2014). In describing their experience with the banking sector of UAE one of the customers described his experience with the HSBC bank. While describing her experience she stated that once while transacting with the ATM of the bank his card went inside the ATM as the ATM had expired. The bank did not replace the ATM for two weeks and the person had to call the phone-banking section several times with no answers. When the customer went to the bank the bank told the customer that she needs to connect to the phone banking report. Next step is to find out how the customer executives or the phone banking executives or the relationship manager of the bank feels about the customer service that is given by the banks to the customers. The questionnaire that was put forward to the executives and phone banking executives of the company are Are you always able to deliver the services that the customer wants from you? Are you able to solve customer problems all the times? What is the difficulty that you face while assisting the customers? Do you feel that assuring customer service is your priority? In giving answers to the above questions the reply given by most of the staffs focused on the point that most of the times they were not able to fulfill or solve the customer issues. They felt that it was the lack of coordination amongst the departments and lack of training provided by the top management as to why they weren’t able to solve the problems of the customers. They also said that one of the reasons was also that they feel that if they spend time on solving the problems of the customers, they would not be able to acquire new business and will lose incentives. They also felt that the lack of rewards provided by the bank to the employees who were efficient problem solvers was also the reason that de-motivated them while trying to solve a problem. Some of the front desk executives felt that it was not their responsibility to solve customer problems and solving the problems that customers faced were the task of phone-banking executives. After analysis of the challenges faced by the banking sector in UAE it is found that the major challenge revolves around the fact that the people or the staffs aren’t motivated enough to take up the problems of the customers and to solve them. It is found there is apathy on the part of the top management towards trying to solve the problems of the customers. In order to survive in the fiercely competitive environment of the UAE banking sector the main focus that the top management lays on is to acquire new clients (Trenwith, 2015). They also do not treat the executives with good incentive measures for better customer service that they provide on their part. The general apathy of the top management to the customer service aspect is reflected in lackadaisical approach to the issue by the front desk executives and the phone banking executives by the bank. The executives are also over dependent on the technology and are not given proper training in how to resolve problems. Another problem is the fact that most of the employees of the bank are not of UAE origin. In fact it is found that due to the fact that the bank offers fixed and long working hours most of the Emiratis prefer not to work in a bank (Arnold, 2014). The foreign people who come to work in these banks do not find any solidarity with the banks in UAE or the customers who come to visit the bank. So, they do not find any need to take a step in order to ensure that the customers’ queries and difficulties are resolved and do not find any need to provide quality customer service. Next set of the questionnaire is put forward to the Human resource head in order to identify his response to the problem and the steps he is taking in order to resolve the issue. His response is attached along with the questionnaire. Do you agree that the executives of your bank do not give quality customer service to the customers? The Hr manager replied that the bank is taking every possible step and has taken such steps in the past to ensure that all the customers’ problems are resolved. Not only that the bank is also heavily investing in technology in order to ensure that future consumer problems do not arise. However there are lacking on certain parts and the bank is trying to resolve those issues by taking necessary steps. What are the steps that are being taken by your bank in order to ensure satisfactory customer service in your bank? In order to ensure satisfactory customer service to be given by the employees of the bank the bank is in the process of devising training for the front desk executives and the phone banking executives of the bank. The bank is also thinking of introducing an incentive for the executives who will be able to solve customers’ problem or whom the customers rank highly in terms of quality of customer services. In addition to that the bank is also thinking of possibilities to recruit Emiratis who might serve the customer with greater dedication and sincerity. References Akbaba, A. (2006). Measuring service quality in the hotel industry: A study in a business hotel in Turkey. International Journal of Hospitality Management. 25(2), pp. 170-192. Al-Marri, K., Moneim M. Baheeg Ahmed, A., and Zairi, M. (2007). Excellence in service: an empirical study of the UAE banking sector. 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